2. Set up a business which accepts Bitcoin then slowly mix the coin into your own turnover. (I am not sure about the legality of this one so maybe get legal advice.)
That would be a picture book example of money laundering so I wouldn't do that!
But yeah, cashing out slowly in small increments is probably the way to go. Even if you raise some red flags there's noting strictly illegal about owning Non-KYC coins in the EU, so while it could be a hassle it shouldn't come with legal problems (unless you try to e.g. evade taxes or launder it as per the example above).